Are Local Gaming Stores Going Extinct?

I wrote the following article nearly three years and while some of my assertions then still hold true, our plethora of local gaming stores are drying up! The latest victim is a combination used bookstore and gaming store. They have done very well for themselves over the last eleven years, but they recently announced they are closing their doors. The reason for their closure is corporate greed (4x increase in rent) by the investment firm that now owns their building and not related to poor sales perse. It will be a sad day to see them go at the end of the month.

Could they have weathered the increase in the rent? In their opinion, no! Even if they had a drastic increase in sales, they know the long-term viability of remaining open is not very likely given the current situation. I am a very frugal gamer that buys online and locally as well, but not everyone has the same shopping habits as I do. Some buy only online (this hurts local stores), others only buy locally (Yeah for them!) and still others are like me. In the end, we all need to do a little more to support local stores, at least those you feel are worth supporting, or we are going to lose them all eventually.

Credit: Jolly Blackburn

This weekend while I was cruising through Facebook I saw a drawing of a street front and it said: “FLGS use it or lose it” (Credit: Jolly Blackburn). That’s a very moving statement in some circles and in others, it has no substantial meaning whatsoever. I have my own feelings on the FLGS’ that dot the international landscape. It needs to be considered that they are no longer relevant in the hobby as a place to buy the latest and greatest. In the days before the internet and online retailers, the FLGS was the place to go to buy, gossip and play all things game related; is this still the case today? I will present my perspective of both sides of this argument and you can decide for yourself if the FLGS is going extinct.

Local game stores are closing at what appears to be an increasing rate which would indicate this segment of our hobby is in decline. Seems strange to say that there is any kind of decline when the hobby as a whole is growing by leaps and bounds each year, but none-the-less stores are closing. I think there are three prominent factors that are affecting stores. The first is the obvious, online retailers with their limited overheard and economy of scale. Local stores are having a hard time competing with the new “online retail” pricing standard that prospective customers have come to accept at the new MSRP norm. Second, the rate of growth within each segment (CCG, RPG, boardgame, mini, etc) of the hobby is a double-edged sword for local stores. To stay competitive and relevant, local stores find themselves buying the latest and greatest, but when that game(s) falls out of favor for the next new “hotness” they could be left with inventory that will no longer fly off the shelf. Lastly, overhead and the costs of maintaining a local store is very expensive and they have to keep the lights on somehow. Conversely, your local store can offer customers things that the online retailers cannot. For example, the local store can offer customers a place to play the games they are buying and in some stores, I have visited they offer customers options like play before you buy. That right there is a great way to explore and try those games that you think would be a good for you! Online retailers can’t offer that service.

Unlike your FLGS, online retailers can buy large quantities of inventory and purchase it at a reduced cost. Thereby, they can offer it to customers for a much less than the local store can. They also have the ability to reach a worldwide audience to help turnover slow inventory. The added ability to reach a worldwide audience allows these online retailers to have higher sales rates. Now, all is not a world of sugar and honey for online retailers either. They still face the costs of doing business. The larger the company, the more warehouse space they need and more employees are needed to process the higher volume of orders they are receiving. One might say the cost of overhead and doing business is proportional to the business model. Online retailers must also deal with the problems that come with shipping goods to customers–damaged or lost packages. Some this cost is absorbed by the insurance that comes with many carriers these days, but there are still situations in which they have to replace items or issue refunds. This problem is exclusive to the online retailers.

With each business model having similar and somewhat unique issues, why then are local stores going out of business in droves? I think customers are wanting the lower prices especially in today’s economy, but there seems to be something else happening. While I am no expert, I have fairly wide knowledge of the industry from several angles and I feel that local stores can’t stay relevant to all customers at all times and the online retailers and even the publishers themselves can. For example, I recently backed the new Night Witches Kickstarter campaign. In doing so, this is a sale any one of my FLGS’s will not get from me. Say a customer wanted a hard to find boardgame from Europe, it’s easier to surf the web find a stateside online retailer that has it in stock and order it. Although the lower price point plays a large part in a customers decision, one must at least acknowledge that product availability is another factor that weighs heavily into the equation. Each of these two business models offers customers different thing and different experiences. So why then are local stores that can offer potential customers many great options or services closing their doors? Is it customers are pre-shopping there and then buying online? Do the local stores just suck and deserve to go out of business? Is it purely the price point and the convenience of the online store?

Let me summarize my feelings. Yes, I like the FLGS and try to support them in small ways when it is practical, but I only make so much money each month and the money I can use for my hobbies is very limited. Therefore, I have to spend my money wisely and if that means shopping online so be it. I should also mention that when the urge for an impulse buy hits me, it’s the FLGS I turn to! I happened to live in an area that has four FLGS’s, of which, one caters to almost every genre of gaming, one caters to designer boardgames and the other two cater to card players. When I shop locally these days, it is the first store I will visit because they are most likely to have what it is I am looking for. I am envious of some of the great stores I hear about from friends all over the world. Some are huge and offer such a diverse schedule of games and events that it would blow your mind. Others try to cater to the local customers by offering great incentives or reward programs that keep folks coming back time after time. Could these things be the secret to why some stores stay open despite the online retailers and their lower price points? Bringing this back full circle to the drawing, what is your take on why local stores are declining? Is it really a use it or lose it situation?

This is all true but the 800-lb white gorilla in the room (to mix my metaphors) is MtG. From what I understand – and this could be severely out of date – Magic alone is as big as the rest of the entire tabletop industry COMBINED. That being the case, it’s no wonder that so many of the stores in my area cater to it.

The other thing is that a lot of them are also comic stores. I know even less about that market than I do CCGs, but I’d bet that online retailers and electronic copies have cut major swathes through it.

I think you are right on both accounts. While I don’t expect stores to cater to every segment of the hobby, most could do more to draw in and support other genres aside from MtG from time-to-time.

Online retailers have indeed cut FLGS revenue streams, but that being said, there are things stores can do to draw those customers in. Game demos being just one thing, but the retailer needs to hook the customer into making the purchase instead of them running home to order online.